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Cabin owners surprised by big increase in taxes

Quite a few of those northern lake cabins and hunting shacks are actually sitting on public property -- tracts that are leased from counties, the state, or even the federal government.

St. Louis County alone owns 930 pieces of recreational property leased to the public. There are more than 2,000 in northeast Minnesota.

According to St. Louis County Assessor Mel Hintz, state officials found lease holders in some Minnesota counties get a much better deal than in other counties.

"The Department of Revenue, in reviewing this issue, found that there's not consistent treatment of these statewide," said Hintz.

“They're an important part of our society up here ... a lot of tradition comes into play.”

St. Louis County Assessor Mel Hintz

"There are some counties that value the land just as though the lessee owns it. There are others that put some kind of restricted value," Hintz continued. "And there are counties, including our county and a number of our neighboring counties, that were not assigning any value to the land whatsoever."

In St. Louis County, a typical lake cabin lessee pays about $240 a year, which accounts for an annual fee based on the value of a modest seasonal lake cabin. Hintz says the state is now going to require the same lessee to pay the value of property taxes for the land it sits on.

The tax amount will be based on the appraised value of that land if it were privately held. Hintz says that's going to be a big hit for the family that keeps a modest lake cabin on a 1.3 acre tract of lakeshore.

"For payable 2009, their taxes would go to $540. And then for paying in 2010, where they would see the second half of that land value increase, they would go to $790," Hintz said.

It's not the worst case example. Hintz says a cabin owner on St. Louis County's Bear Island Lake will see costs jump from $325 a year to $2,500 -- nearly an eight-fold increase.

There's also a question about the fairness of forcing cabin owners to pay the full property tax on land the cabin owner doesn't even own, and that is subject to a lot of restrictions on use.

The notices went out March 1. That's when Hintz's phone started ringing.

"Obviously, they're not pleased. They've been very polite. They understand the situation," said Hintz. "There's a lot of opposition largely because their holding costs, their annual cost of holding that property, are going to go up dramatically."

Even $2,500 a year doesn't sound like a lot for a prime piece of Minnesota lakeshore property, but Hintz says people tell him it endangers long-held family traditions.

"They're an important part of, really, our society up here, especially the hunting leases -- a lot of tradition that comes into play," said Hintz. "And the lakeshore cabins too. When they've raised their kids there, and now the grandkids are coming, it's really a part of the fabric of their family lifestyle."

St. Louis County commissioners are asking the state to reconsider the Department of Revenue's directive.

Commissioners are hoping for at least a delay, until they can convince the Legislature to consider just how the properties should be taxed.